Microbot completes merger with Stem Cell

Israeli company Microbot has developed medical robots for cleaning drainage pipes in the body.

Israeli company Microbot, which three months ago announced its merger into Nasdaq-listed US company Stem Cell, yesterday announced that the merger had been completed. Microbot was founded as investment company MEDX Ventures Group, led by Harel Gadot and based on technology developed by Prof. Moshe Shoham, who also developed the technology of Mazor Robotics Ltd. (Nasdaq: MZOR; TASE:MZOR), a company with a $550 million market cap.

RELATED ARTICLES

Microbot develops miniature robots. The companies first app is for cleaning drainage pipes in the body, for example in the urethra or the brain, thereby removing the necessity for surgery to replace them. The miniature robot functions in the same way as a robot that cleans swimming pools or homes. It is made of titanium, and has arms that move around it. It can be controlled from outside the body and directed within the urethra, so that accumulations of dirt are released, and can be swept out of the drain.

In the future, the product is likely to also prove suitable for cleaning plaque from blood vessels in order to prevent heart attacks and stroke and obviate the need for a balloon or stent. More remote apps include a robot with a camera for taking photographs within the body (like Given Imaging's camera pill, but with the added capability of controlling the location and camera angle) and release of a drug in a specific place.

Microbot also has a technology combining a robot with balloons that can be inflated in a manner that creates an empty pipe space. Surgical tools can be passed through this space, such as a catheterization wire, without risking damage to the sides of the artery. In an announcement on the occasion of the merger's approval, Microbot chairman and CEO Harel Gadot said that the company expected to obtain approval from the US Food and Drug Administration (FDA) for marketing its product in the US in the near future. When the announcement was made, however, the products were still undergoing tests on animals.

More shares in Stem Cells will be issued following the merger, giving Microbot's current shareholders ownership of 95% of the company. Stem Cell was traded at a $20 million market cap prior to the merger. Following the merger and the offering of additional shares, its official market cap rose to $450 million, although shares were diluted, and the share price is expected to change accordingly.

MEDX and private investors have invested $6 million in Microbot to date. Before the news of the merger, Stem Cell's market cap was $5.4 million, but its share price jumped following the merger announcement, despite the expected dilution.

The merger depended on Stem Cell's ability to raise $4 million, which it did by selling assets in the stem cells field. The company's share price has plummeted over the past two years, after its drug for spinal injuries failed in a Phase II trial.